Can FNMA Evict Tenants from Co-op Apartment?

February 27, 2019

LVT Number: #29958

The Federal National Mortgage Association (FNMA) sued to evict tenants from a co-op apartment. FNMA was the assignee of a successful bidder in a nonjudicial foreclosure sale of the building, and it claimed that it was now the building owner. Tenants asked the court to dismiss the case without a trial, claiming that FNMA had no standing to seek their eviction. The court ruled against tenants. A prior decision dismissing an eviction action by FNMA against tenants didn't bar FNMA's new eviction proceeding because co-op shares and the proprietary lease hadn't been transferred to FNMA. And whether the transfer of shares and proprietary lease to FNMA was appropriate given the prohibition on corporate ownership in the lease was a question of fact that required a trial.